CareSuper said the closing of SMSFs is becoming a growing trend with the ATO releasing figures stating in 2012/2013 7,653 people shut down their SMSFs.
CareSuper chief executive Julie Lander said the closing down of SMSFs was due to trustees not realising how time-consuming the management of their fund can actually be.
“Lots of people have set up an SMSF thinking they will relish the control they have over their investments, but they have reported to us that they were not aware of the time associated with compliance requirements and the ongoing costs,” said Ms Lander.
CareSuper said other reasons for trustees closing their SMSFs include its perceived performance expectations not meeting trustees' expectations or the circumstances of the fund member changed due to ill health, death or divorce.
CareSuper also said SMSFs in pension mode often leads to the assets being decreased to a level where the ongoing costs mean it is no longer viable for the trustee to keep running it.
Ms Lander explained closing an SMSF is a very drawn out and complicated process.
“You have to notify the ATO, liquidate or transfer all the assets of the fund, arrange a final audit of your fund, lodge your SMSF annual return and finalise any outstanding tax liabilities,” she said.
